As the U.S. Department of Commerce Thursday hosted a public hearing on the matter, Tennessee stakeholders opposed President Donald Trump’s plan for auto tariffs.
Officials with Volkswagen were initially set to testify at Thursday’s hearing but decided not to because auto industry officials were there to fully represent their perspective, VW spokeswoman said.
The company’s stance is that its “significant long-term investments in the United States” would be damaged by changes to trade, including the proposed tariffs on auto imports from the European Union.
Volkswagen called the tariffs a tax on United States consumers and said they would mean higher prices and would threaten job growth.
Since the plant came to Chattanooga, Volkswagen has invested more than $2.3 billion in Tennessee, built nearly 800,000 vehicles and created 3,500 assembly jobs. The ripple effects of the company’s investment mean VW’s local impact is greater than its direct investment.
According to a statement from the company:
In addition, the potential for escalating trade retaliation presents a serious risk to economic growth in all countries. With particular regard to the importance of the automotive industry, and as part of a global company with an enthusiastic outlook for operational growth in the United States, it is our hope that ultimately policymakers will find a more productive way to address concerns about trade relations.
The Trump administration is investigating imports of automobiles as a matter of national security, using Section 232 of 1962’s Trade Expansion Act.
The administration used that same provision of the act to propose tariffs on steel and aluminum.
Wednesday, U.S. Sen. Lamar Alexander, R-Tennessee, encouraged the Trump administration to reconsider the “dangerous step” of imposing the tariffs.
Although Alexander agrees with Trump on many issues, including taxes, judges, regulations, the economy and the Keystone Pipeline, and said that the president has helped contribute to a “booming economy,” he also took the position that tariffs will hurt jobs and decrease family incomes.
He said he’s respectfully asking that the president reconsider his trade policy, drop the tariffs as a tool for reaching his goals and find better ways to persuade other countries to do for us what we do for them.
“They will undo much of the good the president and Republican Congress have done to restore the economy,” Alexander also said. “I’ve heard story after story, and it’s clear that tariffs will devastate Tennessee’s auto industry and the communities in our state.”
Alexander is working with Senator Doug Jones, D-Alabama, to introduce legislation as soon as next week to encourage the administration to reconsider imposing tariffs on imported automobiles and automotive parts.
This week, after Trump had a meeting with Russian President Vladimir Putin, U.S. Sen. Bob Corker, R-Tennessee, tweeted about the summit between the two leaders and the tariff idea.
In the past, Corker has said that Trump is abusing his authority by using national security as a reason to impose tariffs.
The dam is finally breaking. Thankfully.
As the president taxes Americans with tariffs, he pushes away our allies and further strengthens Putin.
It is time for Congress to step up and take back our authorities.
We have legislation to do that. Let’s vote.
— Senator Bob Corker (@SenBobCorker) July 17, 2018
Tariffs are a tax on the American people, and as the U.S. economy and American businesses and consumers begin to feel the damaging effects of incoherent trade policy, I believe support for our legislation will only grow. We will continue to push for a binding vote.
— Senator Bob Corker (@SenBobCorker) July 12, 2018
A spokeswoman for Corker, who helped recruit Volkswagen to Chattanooga, said he thinks a good first step is for Congress to pass his legislation to take back Congress’ authority on the implementation of national security-designated tariffs.
On Wednesday, U.S. Senate hopeful Phil Bredesen, who is seeking to replace Corker and also helped recruit the automaker to the Scenic City in 2008, renewed his call for Trump to abandon the tariffs.
Bredesen, who was also Tennessee governor when Nissan North America opened its headquarters just outside of Nashville in 2008, said Trump’s tariffs threaten the entire state and that the time for “bureaucratic letters and phone calls,” has passed.
He also said:
A decade of investment by carmakers in Tennessee’s economy is on the brink of being damaged by Washington’s game of chicken… It’s time to stand up to the Commerce Department to make it clear that these tariffs are not just a tax on Tennessee—they are job killers. We’ve made too much progress and we can’t afford to let Washington’s political potholes stall job creation.
When asked about the tariffs, a spokeswoman for Rep. Marsha Blackburn, who is the Republican front-runner seeking Corker’s seat and who Trump has supported, said the tariffs aren’t good for Tennessee, but that she would work with the commerce department.
“Marsha knows this approach to tariffs is a bad deal for Tennesseans and partisan political rhetoric won’t solve this problem,” Blackburn’s campaign spokeswoman Abbi Sigler said via email. “While she opposes the imposition of these tariffs, she will continue to work with both the commerce department and our manufacturers, producers and farmers.”
The Department of Commerce has received nearly 2,400 comments from individuals and companies that can be found here.